10 Things to Consider When it Comes to Energy Contracts

Even if your energy contract isn’t up for renewal, it’s important to know what factors you should consider when that time comes. Knowing these factors and understanding the impact of each one can help you make a more informed decision regarding your energy solution.

Our viewpoint is that there are several factors to consider – beyond length of term – when committing to a contract. Here’s our “Top 10”:

1. Length of the contract – This is a good starting point for sure. Start by making sure your contract’s length is at least in sync with the time you expect to occupy your facility. An attractive five-year rate won’t be so attractive if your lease expires in three years.
2. Current product structure – evaluate this to ensure it still meets your risk profile when thinking about a renewal. Perhaps your current product structure is one that allows for more risk but consider future needs, as well.
3. Overall price and monthly bill – It’s important to look at energy costs in context with your business and the product you are currently on. Is it working? What are your company’s long-term goals? Are you getting what you need out of the product and provider? Are you looking for budget certainty? Are you willing to take on risk with a new product? Another factor regarding energy price is the type of contract. For example, your market prices may differ depending on whether you secure a short-term contract, long-term contract, or fixed-rate contract. Contract language – details matter. Re-read your current contract to see if it still meets your future needs. Its language may need to be updated. Now is the time to review and potentially negotiate certain points.
4. Contract language – Details matter. Re-read your current contract to see if it still meets your future needs. Its language may need to be updated. Now is the time to review and potentially negotiate certain points. Certain aspects to look out for may include fixed price, energy efficiency, general services, and more.
5.  Experience - In a volatile and ever-evolving energy market, this alone can be the cause to switch providers. Guidance and perspective are valuable things.
6. Relationship – consider the relationship you currently have with your sales representative and account management team. Are you receiving the help you need to navigate the renewal process? Think about your provider’s level of service. Is it exemplary? Are they available? Are they knowledgeable
7. Consumption Changes – Energy usage is a very important contract provision that could have a major impact as it relates to situations where your business undergoes a significant change in operations. Depending on your contract, this could also warrant a change in energy price. So be sure to consider whether your business could change and how your contract is worded in the event it does.
8. Adding or removing Sites – this also relates to the flexibility of your energy contract in terms how much volume can be added or deleted before a change in price is triggered. This is often stated in terms of the percentage of the load and should pertain to either a calendar or term basis.
9. Early termination – another “small print” factor and one that could have a big impact depending on how it’s stated and what your impact will be should you opt to back out of it before it’s been completed.
10. Energy market conditions – Just as your business is continually changing, so is the energy market. This creates another factor in terms of how flexible your contract is in relation to marketplace changes. A higher price may be a better “deal” if it comes with a structure designed to adjust to the market.

We can help you make an informed decision and discover your ideal energy contract. Unveil the ideal energy solution for you by diving into key aspects, such as contract type, potential cost savings, the dynamic energy market, reliable energy providers, and the intricacies of an energy supply contract. Empower yourself with the knowledge to make a well-informed choice that aligns seamlessly with your requirements. Contact us to learn more.